State Bond Commission OKs sale of bonds to buy tower near Dome

Ted Jackson/The Times-PicayuneThe state has agreed to lease about 320,000 square feet of space in Benson Tower.

The State Bond Commission gave its blessings Thursday to the issuance of as much as $60 million in bonds to help the family of Saints owner Tom Benson finance the purchase and renovation of the former Dominion Tower property near the Superdome as the new home for state agencies and private businesses.

The panel approved the issue with little debate. Commission Director Whit Kling said the approval is preliminary and that the project must return for final approval when more paperwork is finished, probably next month.

The state will pay about $7.68 million a year to the Bensons for 15 years with a five-year option to renew. The rent will increase with the Consumer Price Index.

The bond issue also will cover the costs of renovating the New Orleans Centre, a largely vacant mall adjacent to the Superdome, which will become an entertainment district, said Lela Folse, a commission analyst.

She said the project is expected to create about 1,000 temporary construction jobs, 550 permanent jobs and retain another 1,850.

Cloyd Van Hook, a New Orleans tax lawyer working on the deal, said the entire project to buy and renovate the tower and the New Orleans Centre is about $83.1 million, with $42.1 million paid to buy it; $21.7 million to make overall repairs to the tower; $12.5 million to remodel the space for state offices; and about $5.4 million to renovate the other office space.

Van Hook said the bonds will jump-start the cash flow to make the repairs. The bonds will be repaid by lease payments. He said the Benson family's company also will use about $13.5 million in new market tax credits and personal resources to complete the acquisition and renovations.

The other element of the Saints deal -- designed to keep the National Football League team in the state through 2025 -- is an $85 million renovation of the Superdome by the state to create more seating areas, box suites and concession stands that will generate money for Benson.

The commission also:

-- Approved the sale of $200 million in state general obligation bonds to finance lines of credit that have been issued for capital construction projects and another $124.8 million to refinance some that have already been issued as a cost-saving measure. The bonds will be the first general state bond sale since September 2006, Kling said. The bonds are expected to be sold in October.

-- Approved lines of credit for new projects totaling $44.66 million. Some of the projects to be financed include museums, road and drainage projects, $300,000 for the Louisiana Children's Museum in New Orleans, and $100,000 for a "junior golf training facility" in Shreveport to help children learn the sport. But when Secretary of State Jay Dardenne pointed out that the course where the project would take place is closed, state officials said they will investigate and will not spend the money if the course is indeed closed.

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Ed Anderson can be reached at eanderson@timespicayune.com or 225.342.5810.

Ted Jackson/The Times-PicayuneBenson family members say they hope their investment breathes life into the upper Poydras corridor and spurs further investment in downtown.